With the shadow economy accounting for 28 percent of GDP, Romania is on a par with Croatia, Estonia and Lithuania, and only second after Bulgaria, whose unreported economy has the biggest share of 31 percent of GDP, according to a study published by Visa Europe, the payments technology company.
The local shadow economy amounts to EUR 40 billion, which is a 3.5 percent reduction on 2008. It fell by 15 percent in the last decade, due to the increase in electronic payments, the global financial crisis and the preparation for EU accession.
Catalin Cretu, country manager of Visa Europe – Romania, said: “The electronic payments system clearly supports the reduction of the shadow economy. At present, Romania trails the EU average of 180 electronic transactions (banking transfers, direct debit operations and on cards) per inhabitants, with just 16 yearly transactions. Reducing the circulation of cash can serve as an efficient tool in combating the shadow economy.”
According to the report, Romania’s GDP is expected to bounce back to the pre-recession level of EUR 140 billion and the shadow economy should shrink by EUR 1.5 billion.
The report further states that countries with high levels of electronic payment usage, such as the UK and the Nordic countries, have smaller shadow economies, compared to economies with an undeveloped electronic payments culture, such as Bulgaria, Romania and Greece.
The shadow economy in Europe is estimated at EUR 2,100 billion, representing 18.5 percent of the economic activity.